Fed pleased with banks use of discount window borrowing
The Fed has introduced a series of moves to increase liquidity
Recent changes to borrowing policies are being received well by the financial community.
The Federal Reserve Board says it is encouraged by the notable increase in discount window borrowing this week with banks demonstrating a willingness to use the discount window as a source of funding to support the flow of credit to households and businesses.
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The Fed encouraged the use of the discount window and banks have responded.
FED MOVES TO ENSURE LIQUIDITY IN MONEY MARKET MUTUAL FUNDS
By providing ready access to funding, the discount window helps depository institutions manage their liquidity risks efficiently and avoid actions that have negative consequences for their customers, such as withdrawing credit during times of market stress.
The Fed has introduced a series of moves to increase liquidity.
On Wednesday, the Fed established an emergency lending facility to support the flow of money to loan to households and businesses.
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The Money Market Mutual Fund Liquidity Facility, or MMLF, will make loans available, through the Federal Reserve Bank of Boston, to eligible financial institutions secured by high-quality assets purchased by the financial institution from money market mutual funds.